Russia to fine Shell on Sakhalin project - Business - International Herald Tribune

MOSCOW — Royal Dutch Shell's $22 billion oil and gas project on the Russian island of Sakhalin has broken a significant number of environmental regulations "in barbaric fashion" and the company and its partners would have to pay a fine, the natural resources minister, Yuri Trutnev, has said.

Trutnev said that the process of working out the size of the fine should be ready by the middle of 2007, adding that Moscow had no intention of revisiting the original production-sharing agreement that Shell and its partners signed with Russia.

The declaration Tuesday was the latest in a steady flow of charges from Russian officials, who have threatened to pull critical permits at the Sakhalin-2 development.

A spokesman for Sakhalin Energy, the consortium that Shell leads, was not immediately available to comment.

Observers contend that the attention is aimed at pressuring Shell in order to secure more favorable terms for the state-controlled gas monopoly Gazprom to join the project.